Fraud Against SMEs Results in 50,000 Jobs Lost

Small businesses in the UK have been forced to cut up to 50,000 jobs because of fraud and cyber crime, according to new research by YouGov.

The study was carried out on behalf of Barclays bank and found that:

  • 44% of SMEs had been been targeted by fraudulent scheme
  • 23% of SMEs had fallen victim to fraud
  • Over 10% of SMEs had suffered a cyber attack.
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    Of the 10% who which had been exposed to cyber-crime, 8.58% had to make staff redundant to cover the cost of the attack. The average cost of fraud to a business was £35,000. So when you consider that there are 5.687m small businesses in the UK this means 52,120 jobs and £40bn lost.

    Chief executive of Barclays Business Banking, Ian Rand, said: “Fraudsters are targeting hard-working entrepreneurs, in some cases impersonating suppliers and staff, intercepting emails and sending fake invoices. The staggering cost of these crimes can stop a small business from investing in new jobs, training or equipment, in turn boosting local economies.”

    Barclays has teamed up with ex-Arsenal and England defender Sol Campbell to help educate businesses on how to protect against fraud and cyber-crime. Campbell, who owns bespoke furniture company, FBC London, said: “As an owner of a small business that has fallen foul of cyber criminals, I’m particularly keen to raise awareness and show fraudsters the red card.” Campbell has been hosting a series of cyber-skills masterclasses for Barclays Business Banking customers.

    How Can You Protect Your Business?

    It’s true of course that fraudsters target businesses of all sizes, but often small enterprises and start ups are regarded as more vulnerable as they tend not to have the same levels protection in place. Fraud can damage both a business’ finances and reputation. So what can you do to protect your business against fraud?

    Check Potential Employees
    It’s a sad statistic, but ActionFraud found that as many as 1 in 5 small businesses have suffered fraud at the hands of an employee. Always get multiple references and even carry out a credit check for any new employees to highlight any potential issues before hiring.

    Screen New Suppliers & Customers
    You should also check the credentials of any new supplier or customer including credit checks and online reviews or complaint forums.

    Improve Your Transaction Processes
    If you deal in purchase orders it’s crucial that you have it before you deliver your product or service. Check the details of the order including matching delivery and registered addresses. If the business is non-incorporated you should request a utility bill as proof of address.

    Trust Your Instincts
    If a supplier or customer is making sudden changes, erratic decisions, asking you to change your processes as a ‘one off’ or is using non-geographic of fixed-line telephone numbers, something may be off. Don’t continue with anything which makes you suspicious or uncomfortable.

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